She also raised prices for sick and emergency visits. She passes those costs on to consumers and has raised her fee for a basic wellness exam 10% to $62. Kintz-Konegger said her fees for blood tests and other lab work rose 8% both in January and August. The cost of surgical supplies, medicines and lab tests are still increasing, too. Measured year over year, pay leapt 14.2% in January, the highest jump on records dating from 2007. Government data shows that hourly pay in the vet industry jumped 7% in August from a year earlier, well above the 5% average for all workers. Those wage increases have typically been passed on to pet owners in the form of higher prices. With wages rising nationally at the fastest pace in decades, many clinic owners have had to pay more to find or keep employees. Like many services, veterinary care is labor-intensive worker pay makes up about half the cost of running a practice. And labor shortages are everywhere, leading to higher labor costs.” “Prices for services have been rising at a fast rate. “Therein lies our biggest challenge,” Williams said. Speaking last week, John Williams, president of the Federal Reserve Bank of New York, likened inflation to the layers of an onion, with goods representing the outer layers that are peeled first and services prices the stickier underlying layer. Spiking services prices are a big reason why Fed officials have stressed their determination to keep raising rates to move inflation back toward their 2% target, even as worries have grown that they'll go too far and derail the economy. By contrast, services inflation has marched steadily higher, to a 6.1% annual rate from just 2.7% a year ago.

Excluding volatile food and energy, price increases in goods have eased from a 12.4% annual rate in February to 7% in August. Though that would be down from an 8.3% jump in August, it would still far exceed Americans' average wage gains.Įven as services grow costlier, goods inflation is slowing. On Thursday, when the government issues consumer inflation data for September, it's expected to report that prices jumped 8.1% from a year earlier. “The real question is: What level of unemployment is going to be needed to cool off all this pressure?” “It takes more to move the prices of services,” said Joseph Gagnon, a former Fed official who is a fellow at the Peterson Institute for International Economics. And in today’s economy, the service sector accounts for the bulk of consumer spending. The Fed's rate hikes, which affect consumer and business loans, aren't ideally suited to taming services inflation.

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